[House Hearing, 112 Congress] [From the U.S. Government Publishing Office] [H.A.S.C. No. 112-51] HUMAN CAPITAL MANAGEMENT: A HIGH-RISK AREA FOR THE DEPARTMENT OF DEFENSE __________ COMMITTEE ON ARMED SERVICES HOUSE OF REPRESENTATIVES ONE HUNDRED TWELFTH CONGRESS FIRST SESSION __________ HEARING HELD JULY 14, 2011 [GRAPHIC] [TIFF OMITTED] TONGRESS.#13 U.S. GOVERNMENT PRINTING OFFICE 68-159 WASHINGTON : 2011 ----------------------------------------------------------------------- For sale by the Superintendent of Documents, U.S. Government Printing Office, http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202�09512�091800, or 866�09512�091800 (toll-free). E-mail, [email protected]. HOUSE COMMITTEE ON ARMED SERVICES One Hundred Twelfth Congress HOWARD P. ``BUCK'' McKEON, California, Chairman ROSCOE G. BARTLETT, Maryland ADAM SMITH, Washington MAC THORNBERRY, Texas SILVESTRE REYES, Texas WALTER B. JONES, North Carolina LORETTA SANCHEZ, California W. TODD AKIN, Missouri MIKE McINTYRE, North Carolina J. RANDY FORBES, Virginia ROBERT A. BRADY, Pennsylvania JEFF MILLER, Florida ROBERT ANDREWS, New Jersey JOE WILSON, South Carolina SUSAN A. DAVIS, California FRANK A. LoBIONDO, New Jersey JAMES R. LANGEVIN, Rhode Island MICHAEL TURNER, Ohio RICK LARSEN, Washington JOHN KLINE, Minnesota JIM COOPER, Tennessee MIKE ROGERS, Alabama MADELEINE Z. BORDALLO, Guam TRENT FRANKS, Arizona JOE COURTNEY, Connecticut BILL SHUSTER, Pennsylvania DAVE LOEBSACK, Iowa K. MICHAEL CONAWAY, Texas GABRIELLE GIFFORDS, Arizona DOUG LAMBORN, Colorado NIKI TSONGAS, Massachusetts ROB WITTMAN, Virginia CHELLIE PINGREE, Maine DUNCAN HUNTER, California LARRY KISSELL, North Carolina JOHN C. FLEMING, M.D., Louisiana MARTIN HEINRICH, New Mexico MIKE COFFMAN, Colorado BILL OWENS, New York TOM ROONEY, Florida JOHN R. GARAMENDI, California TODD RUSSELL PLATTS, Pennsylvania MARK S. CRITZ, Pennsylvania SCOTT RIGELL, Virginia TIM RYAN, Ohio CHRIS GIBSON, New York C.A. DUTCH RUPPERSBERGER, Maryland VICKY HARTZLER, Missouri HANK JOHNSON, Georgia JOE HECK, Nevada BETTY SUTTON, Ohio BOBBY SCHILLING, Illinois COLLEEN HANABUSA, Hawaii JON RUNYAN, New Jersey AUSTIN SCOTT, Georgia TIM GRIFFIN, Arkansas STEVEN PALAZZO, Mississippi ALLEN B. WEST, Florida MARTHA ROBY, Alabama MO BROOKS, Alabama TODD YOUNG, Indiana Robert L. Simmons II, Staff Director Cathy Garman, Professional Staff Member Vickie Plunkett, Professional Staff Member Lauren Hauhn, Research Assistant C O N T E N T S ---------- CHRONOLOGICAL LIST OF HEARINGS 2011 Page Hearing: Thursday, July 14, 2011, Human Capital Management: A High-Risk Area for the Department of Defense............................. 1 Appendix: Thursday, July 14, 2011.......................................... 27 ---------- THURSDAY, JULY 14, 2011 HUMAN CAPITAL MANAGEMENT: A HIGH-RISK AREA FOR THE DEPARTMENT OF DEFENSE STATEMENTS PRESENTED BY MEMBERS OF CONGRESS McKeon, Hon. Howard P. ``Buck,'' a Representative from California, Chairman, Committee on Armed Services.............. 1 Smith, Hon. Adam, a Representative from Washington, Ranking Member, Committee on Armed Services............................ 2 WITNESSES Charles, Keith, Director, Human Capital Initiatives (Acquisitions, Technology and Logistics), U.S. Department of Defense........................................................ 6 Farrell, Brenda, Director, Defense Capabilities and Management, U.S Government Accountability Office, and John Hutton, Director, Acquisition and Sourcing Management Team, U.S. Government Accountability Office............................... 3 Tamburrino, Pasquale (Pat), Jr., Deputy Assistant Secretary of Defense (Civilian Personnel Policy)............................ 5 APPENDIX Prepared Statements: Charles, Keith............................................... 72 Farrell, Brenda, joint with John Hutton...................... 35 McKeon, Hon. Howard P. ``Buck''.............................. 31 Smith, Hon. Adam............................................. 33 Tamburrino, Pasquale (Pat), Jr............................... 56 Documents Submitted for the Record: [There were no Documents submitted.] Witness Responses to Questions Asked During the Hearing: Mrs. Hartzler................................................ 83 Questions Submitted by Members Post Hearing: Ms. Bordallo................................................. 88 Mr. Forbes................................................... 89 Mr. McKeon................................................... 87 Mr. Palazzo.................................................. 91 Mr. Turner................................................... 90 HUMAN CAPITAL MANAGEMENT: A HIGH-RISK AREA FOR THE DEPARTMENT OF DEFENSE ---------- House of Representatives, Committee on Armed Services, Washington, DC, Thursday, July 14, 2011. The subcommittee met, pursuant to call, at 1:05 p.m. in room 2118, Rayburn House Office Building, Hon. Howard P. ``Buck'' McKeon (chairman of the committee) presiding. OPENING STATEMENT OF HON. HOWARD P. ``BUCK'' MCKEON, A REPRESENTATIVE FROM CALIFORNIA, CHAIRMAN, COMMITTEE ON ARMED SERVICES The Chairman. Good afternoon, ladies and gentlemen. Thank you for joining us today as we look at the Department of Defense's human capital planning efforts. Unfortunately, because most of the Federal Government, particularly the Department of Defense, has done such a woeful job in this area, it landed on the GAO's [Government Accountability Office's] high-risk list in 2001. After 10 years, it is still listed as high risk. Improvement in DOD's [the Department of Defense's] management of its strategic human capital resources is an absolute must. As the Defense Business Board pointed out, we have active duty military serving in positions that might otherwise be suitable for civilians. This could result in a serious misapplication of the special training and skills of our Armed Forces. In contrast, too often we have seen contractors serving in positions that should be staffed by civilians or military. The potential for waste and mismanagement is enormous when one considers the 718,000 DOD civilians and the several thousand of private sector contractors. Recognizing this, Congress mandated that DOD conduct a thorough analysis of its manpower requirements and develop a strategic plan of action for shaping its civilian workforce to address shortfalls in critical skills and competencies that affect performance of DOD's operations and the readiness of its forces. The analysis isn't about insourcing versus outsourcing. These are just planning tools, like military to civilian conversions, to ensure the appropriate element of the workforce, be it military, civilian or contractor, is being used and that adequate oversight is in place. I believe this is simple common sense, so I find it disheartening that Congress actually had to step in and require this analysis, because DOD paid little or no attention to something so logical and so critical as workforce management. This is particularly true in the area of acquisition management, where a continuing shortage of trained acquisition personnel impedes DOD's capacity and capability to oversee its increasingly complex contracts. As GAO noted in its 2011 high-risk report, I quote, ``The lack of well-defined requirements, the use of ill-suited business arrangements, and the lack of an adequate number of trained acquisition and contract oversight personnel contributes to unmet expectations and placed the Department at risk of potentially paying more than necessary.'' Over the past several years Congress has provided the Department with various flexible authorities aimed at improving the Department's acquisition workforce. However, on a broader workforce level, we were informed last year that several significant manpower policies were on the verge of being signed out. But to date, we have seen nothing. Instead, arbitrary decisions are being made without sufficient analysis being conducted or guiding principles in place. As a result, the committee has included several provisions in this year's authorization bill to force a more effective human capital planning and total force management approach. An improved manpower requirements and termination process should ensure that DOD has the right people with the right skills doing the right jobs in the right places at the right time. Again, this is just simple common sense. And I look forward to our discussion here today. Ranking Member Smith. [The prepared statement of Mr. McKeon can be found in the Appendix on page 31.] STATEMENT OF HON. ADAM SMITH, A REPRESENTATIVE FROM WASHINGTON, RANKING MEMBER, COMMITTEE ON ARMED SERVICES Mr. Smith. Thank you, Mr. Chairman. And thank you for the witnesses for being here today and for their work. This is obviously a critical piece of the Department of Defense. Human capital is the most important thing in whether or not our military functions well. That is true for both civilian and active duty. Here today we are going to talk mostly about the civilian side of it, but I think it is important whenever we think of human capital think of the total operation--everybody who is working--bless you--for the DOD should be part of our calculation. How do we get the most out of people that we hire? They are our most valuable asset. Add to that the fact that we are entering very, very difficult budget times and comparatively over the course of the last decade we have had a fair amount of money. We have seen the defense budget grow. And there are challenges there as well. As it grows that fast, sometimes you are not as careful as you should be with how you spend the money. And I think we have witnessed that. Now, we are going to enter into a phase where we have the opposite problem--tighter resources, tougher choices to be made. And I think what this committee wants, while we understand that you have to make those budget choices. And I always, you know, as someone who had to try to deal with the budgets here on the Federal level, always love it when people say, ``You know, this is just too important; cost shouldn't be an issue.'' That is a noble sentiment. And I wish I lived in that world. But we don't. Cost will always be an issue. But when you are looking at cost, you also want to make sure that you don't just throw up your hands and arbitrarily go, ``Let us just cut it at this point and move on.'' Try to be strategic in how we make those decisions, because a lot of times excessive cuts can wind up costing more money. I think that, you know, is arguably the case with what happened with our acquisition force, as the chairman mentioned. You know, we did a pretty substantial cut in our acquisition force over the course of about 10 years. And when you look at the last decade of acquisitions in the Department of Defense, you see a very spotty record, at best. Clearly, there was money that could have been saved. And recapitalizing that force, getting more trained acquisition people in the DOD is critically important. So we have to try and balance all of those things. I know you don't have an easy job in trying to do that. And I look forward to your testimony explaining to us how we are going to go about doing it. And we offer any support we can give from this committee. Thank you, Mr. Chairman. I yield back. [The prepared statement of Mr. Smith can be found in the Appendix on page 33.] The Chairman. Thank you. And thank you all for being here today. We are going to have a problem. At about 2 to 2:30 they are going to call for votes. And that is probably going to bring an end to our hearing. So if I could ask you to please make your statements as succinct as possible, to give as much time as we can for questions, I would appreciate that. Again, thank you for being here. We have with us today Ms. Brenda Farrell, the director of defense capabilities and management in the Government Accountability Office; Mr. John Hutton, director, Acquisition and Sourcing Management Team from the U.S. Government Accountability Office; Mr. Pat Tamburrino, Jr., Deputy Assistant Secretary of Defense for Civilian Personnel Policy, and Mr. Keith Charles, Director of Human Capital Initiatives, Acquisitions, Technology, & Logistics. Let us start with Ms. Farrell. STATEMENT OF BRENDA FARRELL, DIRECTOR, DEFENSE CAPABILITIES AND MANAGEMENT, U.S GOVERNMENT ACCOUNTABILITY OFFICE, AND JOHN HUTTON, DIRECTOR, ACQUISITION AND SOURCING MANAGEMENT TEAM, U.S. GOVERNMENT ACCOUNTABILITY OFFICE Ms. Farrell. Thank you, Mr. Chairman. Mr. Chairman, Ranking Member Smith and members of the subcommittee, thank you for the opportunity for my colleague Mr. Hutton and myself to be here today to discuss our work on DOD's human capital management of its large, diverse civilian workforce. Strategic workforce planning, an integral part of human capital management, helps organizations to determine if they have staff with the necessary skills and competencies to accomplish their strategic goals. Since 2001, as you noted, Mr. Chair, we have listed human capital management for Federal civilians as a Government-wide high-risk area. Although some progress has been made, GAO reported last February the area remains on our high-risk list due to the need for agencies, including DOD, to address current and emerging skill gaps that are undermining their ability to fulfill their vital missions. Also, within DOD, the workforce-related issues have contributed to challenges in several of DOD's high-risk areas, including contract management. Over the years, Congress has required DOD to conduct human capital planning efforts for its overall civilian, senior leader, and acquisition workforces and provided various tools to help manage the Department's use of contractors, which augments DOD's total civilian workforce. While the specific requirements vary for each category, legislation required DOD to assist the skills, competencies and gaps, projected workforce trends and needed funding, among other things. The legislation also required us to assess DOD's plans. And we have responded to that legislation with three reports to date. Our workers found in general DOD's efforts to address legislative reporting requirements have produced mixed results. Today our written statement primarily summarizes the findings of our September 2010 report and is divided into three parts. The first addresses DOD's overall civilian workforce plan. We found that DOD assessed the critical skills of its existing workforce. The plan discusses 22 mission-critical occupations which, according to DOD, represents the results of the Department's assessment. However, DOD had not completed, one, an assessment of gaps in the existing or the projected workforce; two, identification of recruiting and retention goals and, importantly, funding; and, three, an assessment of its progress using results- oriented performance measures. For example, DOD's plan shows that DOD had started competency gaps for only three of its 22 mission-critical occupations: language, logistics management and information technology. The plan does not discuss competency gaps for the other 19 mission-critical occupations. The second part of our statement addresses the senior leader workforce plan. We found that the plan identified changes needed in the number of senior leaders authorized and, at the time of our review, stated that it expected executive requirements to increase by more than 400 by fiscal year 2015. However, in a separate review, we found that DOD did not document its analysis or summarize its results. Further, while DOD reported to Congress that this was a rigorous analysis, we found that some components' information was incomplete. Also, DOD's workforce plan did not assess the critical skills for its existing or its future senior leader workforce needs. Finally, the last part of our statement addresses DOD's acquisition workforce plan. We found that DOD identified the need to increase the size of this workforce, which consisted of about 118,000 civilians as of September 2009, by 20,000 personnel by fiscal year 2015. In the plan, DOD outlines its strategies for growing this workforce. However, DOD had not completed: one, assessments of the skills and competencies of its acquisition workforce; two, identified what the appropriate mix of its total acquisition workforce needs should be; or, three, included information needed, such as funding. In summary, Mr. Chairman, while DOD has taken some positive steps, such as identifying mission-critical occupations and projecting workforce trends, DOD has made limited, progress, however, in identifying the skills and competency gaps that its workforce needs. Until DOD identifies the critical skills and competencies and the actual gaps and the root causes of those gaps, it will be difficult, for example, for the Department to develop effective recruitment, retention and investment strategies. Thank you, Mr. Chair. That completes our statement. We will be happy to take questions when you desire. [The joint prepared statement of Ms. Farrell and Mr. Hutton can be found in the Appendix on page 35.] The Chairman. Thank you very much. That takes both--okay. Mr. Tamburrino. STATEMENT OF PASQUALE (PAT) TAMBURRINO, JR., DEPUTY ASSISTANT SECRETARY OF DEFENSE (CIVILIAN PERSONNEL POLICY) Mr. Tamburrino. Chairman McKeon, Ranking Member Smith and members of the committee, my name is Pat Tamburrino Jr. I am the Deputy Assistant Secretary of Defense for Civilian Personnel Policy reporting to the Under Secretary of Defense for Personnel and Readiness, Dr. Clifford Stanley. On behalf of the Secretary of Defense, Leon E. Panetta, and Dr. Stanley, I would like to thank you for inviting the Department of Defense to appear at this hearing today to discuss the Department's effort to enhance strategic human capital management in support of its critical missions. Allow me to offer that, while our efforts in the last 2 to 3 years have resulted in steady improvement, such as in the management of our senior leaders, there is significant room for enhancement. I take seriously my responsibility of DOD leadership and the Congress to deliver cogent analysis and a rational plan to manage our workforce of greater than 780,000 employees. At the organizational level, leadership is relying on our strategic workforce plan to accurately map our current workforce skill set at all levels and to develop the tools and methodologies which will allow us to understand the demand signal for personnel resources, implement analytically-based methods which support long-term workforce planning, and identify the strengths and weaknesses in the skill portfolio, and develop targeted programs and strategies. At the individual level, employees are counting on DOD leadership to deliver career road maps which allow them to develop their functional and leadership skills in response to mission needs and implement corresponding individual development plans. To accomplish this, we need to leverage the successful workforce planning efforts made by the Department's acquisition community. We need to build upon the improvements we have made in managing the utilization of our senior leaders and we must develop a DOD-wide implementation plan for an integrated total force planning framework. Over the past several years, the Government Accountability Office has offered very constructive feedback of the Department's strategic workforce plan. I agree with the GAO's comments. To address GAO concerns, I am working a multidimensional strategy, including expanding coverage of the strategic workforce plan from 40 percent to 80 percent of the DOD civilian workforce; defining the market basket of functional competencies that employees in each career field should possess from entry through senior levels, based on current and emerging mission requirements; determining the proficiency levels each employee should have for their respective functional competency; developing career road maps that outline the training, education and job expectations across all of the occupational skill sets; implementing common planning and forecasting processes and tools that drive the consistent and efficient Department-wide plans; and, finally, tracking progress against the result-oriented performance measures which are identified in our fiscal year 2010 through 2018 strategic workforce plan. Fiscal 2012 will be a transitional year for DOD workforce planning as we implement this new strategy. In fiscal year 2013 through 2015, I expect DOD's workforce planning capability effort to have matured to meet Congress's requirements. In conclusion, the Department acknowledges that our evolution is not yet complete, but we have a vision for how to meet the requirements directed by Congress. The Department is committed to enhancing strategic human capital management in support of its mission. It is a top DOD priority. Thank you again for your interest in this critical area and for the opportunity to speak with you today. I am pleased to take your questions. [The prepared statement of Mr. Tamburrino can be found in the Appendix on page 56.] The Chairman. Thank you very much. Mr. Charles. STATEMENT OF KEITH CHARLES, DIRECTOR, HUMAN CAPITAL INITIATIVES (ACQUISITIONS, TECHNOLOGY AND LOGISTICS), U.S. DEPARTMENT OF DEFENSE Mr. Charles. Chairman McKeon and Ranking Member Smith and members of the committee, my name is Keith Charles. I am the Director of Human Capital Initiatives, directly responsible to the Honorable Ashton B. Carter, Under Secretary of Defense for Acquisition, Technology and Logistics; and Mr. Frank Kendall, his Principal Deputy, for providing leadership and management to all Department-wide matters for defense and acquisition workforce. Thank you for the invitation to appear before you here today. I am pleased to be here with an important colleague in our workforce efforts, Mr. Pat Tamburrino, Deputy Assistant Secretary of Defense for Civilian Personnel Policy. I also look forward to working with the General Accounting Office as we continue to improve our efforts to strengthen the acquisition workforce and improve acquisition outcomes. I ask that you include my written statement in its entirety. The Chairman. All of your written statements will be included in the record. With no objection, so ordered. Mr. Charles. All right. Thank you. My prior work in DOD included establishing the first acquisition corps in the Department of Defense when I was with the Department of the Army. The predecessor to the program implemented by DAWIA, the Defense Acquisition Workforce Improvement Act. My return to the Department in March of 2011 is indeed an honor, and I look forward to serving the Nation by strengthening not only today's acquisition workforce, but strategically ensuring the readiness of the future acquisition workforce. We must not only address the immediate challenges and risks; we must also ensure readiness of the mid-career acquisition workforce in the 5- to 10-year horizon. If there is one take away today, it is this. The shortage we have is in the 5- to 10-year horizon. We need to focus-- focus on that and fix that before it becomes a disaster. While action has been taken to rebuild and improve the acquisition workforce, significant efforts remain. Secretary Panetta and Under Secretary Carter are leading efforts to maintain a strong national defense while improving our discipline and managing taxpayer resources. The Department must increase its buying power and deliver on efficiencies and affordability imperatives while modernizing and resetting our military force. We must maintain a core acquisition capability and continuously improve the acquisition outcomes to ensure our warfighters always have the decisive edge. To achieve these imperatives, the Department must have high-quality military and civilian acquisition workforce and appropriately use talent of federally funded research and development centers, FFRDCs, and university-affiliated research centers, UARCs, and contracting support. Since 2009, DOD leadership reversed the decline in acquisition workforce by establishing and filling new capacity positions. The Department's initiative to grow the workforce is continuing. We have achieved 8,600 of the original 20,000 target in new work force capacity. There are two parts to the growth initiative. Ten thousand of the workforce growth is supported by the Defense Acquisition Workforce Development Fund. We will finish this growth. Another 10,000 is part of the Department's insourcing initiative. We have completed 3,200 of this growth now; however, remaining insourcing will be on a case-by-case basis. Our growth to date is aligned with strategy. We have strengthened in-house systems engineering, tests, program management, contracting, cost estimating and contract pricing capacity. We have also increased the capacity of the Defense Contract Management Agency and the Defense Contract Audit Agency. As we complete efforts to restore size, we must place major emphasis on having a qualified and ready workforce. One of our greatest imperatives is to ensure the readiness of the smaller mid-career acquisition workforce to succeed the larger senior career workforce. Many in the senior career workforce are retirement age now or near retirement. The mid-career group needs the capacity, capability and experienced readiness to be acquisition leaders and take on major acquisition responsibilities. We must strengthen the mid- career workforce through coaching, mentoring and mastering practitioners from the senior workforce. We must ensure not only continuous learning, but continuous career development. We must ensure mid-career development which builds on early career certification, creates the next generation of masters in our acquisition profession. The Department's collective efforts to strengthen the acquisition workforce represents a sound and effective approach to reducing risk. GAO found that DOD's April 2010 plan addressed five of the statutory report requirements, partially addressed another 10, and did not address one, which required input on statutory needs. Our next chapter of initiatives will strengthen our strategy, reduce risk, and continue progress to meet statutory requirements. We appreciate the support from this committee on the President's proposed fiscal year 2012 budget request to continue the acquisition workforce improvement program. We also appreciate this committee's support of the President's proposal to create a consistent 3-year availability of all credits to the Department of Defense workforce development fund. We are very concerned about the $200 million reduction to the DAWDF [Defense Acquisition Workforce Development Fund] in the House fiscal year 2012 defense appropriations bill. We need full restoration, or we will need to use the internal DOD collection process to obtain funds needed in order to fully accommodate the painful reductions of O&M [Operations and Maintenance] accounts across the components. You have my commitment to make sure that these funds are judiciously used to meet our highest priorities. In conclusion, I believe the Department has taken decisive actions to address human capital risks by rebuilding and strengthening the acquisition workforce. However, we must apply lessons from the past and follow through with strategies that continuously build a high-quality acquisition workforce. Acquisition is a core function of good government and of national security. We must increase our buying power and deliver on efficiency and affordability imperatives, while modernizing and resetting our military force. We must always ensure that our warfighters have the products and services they need to maintain this decisive edge. To achieve these imperatives, the Nation and the Department must have a consistently right-sized, high-quality acquisition workforce. We must act now to ensure readiness of the mid- career acquisition workforce in the 5- to 10-year horizon. I thank you for this opportunity, and I welcome your questions. [The prepared statement of Mr. Charles can be found in the Appendix on page 72.] The Chairman. Thank you very much. We are concerned about some of those budget cuts, too. Some of the appropriators cut more deeply than we did. And there have been a lot of cuts in defense in the last year-and-a-half that we have a lot of concerns about. Mr. Tamburrino, what initiatives are being undertaken to ensure that the Department's workload and missions are prioritized, eliminated where feasible, or made more efficient to ensure that the Department aligns the right persons with the right skills at the right time and the right quantity to perform the right tasks? Mr. Tamburrino. Mr. Chairman, thank you for that question. In our total force management plan we are pursuing exactly that rubric. We are taking in the Department's missions, prioritizing them and trying to match them across three dimensions: warfighting platforms, supporting infrastructure, and people. For people we have three choices: civilian, military and contractors. Trying to always determine where is the best mix, where is the best talent set, and how do we effectively meet the mission--the Department's mission needs? And the efficiency efforts undertaken in the past year all drive towards prioritization of mission, identification of overhead administrative functions, and other low-value work that can be eliminated so we can apply the resources effectively to the workload in the priority that the Department determines meets the national needs. The Chairman. It is hard to do all of this. Like, for right now I would like to have the lawnmowers---- [Laughter.] The Chairman. Cut someplace else at this--at this particular time. But that is kind of the way we are. Thank you. Ranking Member Smith. Mr. Smith. Thank you. Ask you about the contracting out issue and the A-76 process and sort of what goes into that. That has sort of been a vexing issue for some time. It seems like a fairly simple concept. You know, you make an economic decision as any business would do. You know, what makes the most sense, what is the most cost effective to do, and how something makes the most sense to do contracting out? Unfortunately, there are all kinds of ideological and stakeholders involved. So it--the process becomes horribly messed up. Is there any hope that we just have a sensible approach when it comes to civilian employees and fairly accurately measure, ``Okay, this makes sense to contract out, this makes sense to keep in-house?'' Are we making any progress in being able to do that, understanding that a lot of what drives it, of course, is, you know, the civilian workforce wants everything in-house, you know, the business community wants everything contracted out to them. And they are unbelievably clever in generating their arguments as to why they are right, and I mean that quite sincerely. If you listen to either side you are absolutely convinced that they are correct. How are we doing in trying to strike a balance there? And if folks at GAO have anything to say about that, as well, I would be interested. Mr. Tamburrino, why don't you take the first crack there? Mr. Tamburrino. Mr. Congressman, thank you for that question. We recently submitted a report to Congress on A-76 studies supporting the lifting of the moratorium on those studies. We believe they are an effective tool for helping to manage our workload and balance that workload against our resources. That report has several ideas for improved processes on how to make that program more efficient, more effective, take less time and educate managers how to use it. We think it is an effective tool to help us manage the workload appropriately. So we look forward to having continued discussion with you on that report once you have a chance to review it. Mr. Smith. Okay. So you think an apples-to-apples comparison is possible, because that is always one of the difficulties there? Because, you know, I mean, contractors do things differently than, you know, civilian workforce. Mr. Tamburrino. Sir, I think the Department's efforts are to make sure that those efforts which are inherently governmental, closely inherently governmental, or efforts that are inappropriate to do in the private sector for other regulatory reasons are in fact presented as opportunities for insourcing. When that is not true, we look at where is the best place to get that work done at the most efficient cost. And when it is outsourced we apply the Federal acquisition regulations and related. I think our report offers some ideas on how we can do that more efficiently and effectively. It is a good tool for managers to use. Mr. Smith. Okay. Mr. Hutton, did you want to---- Mr. Hutton. Yes, I would like to say that at first you want to know what your total force is. You want to know what the mix should be. But to do that you have to know what your current capacity is. What are people, whether it be civilian, military, what kind of things are they actually doing, what are their competencies? But just as importantly, to what extent are you relying on contractors for activities as well? And when you break it down to looking at what are the contractors doing, and in particular the total force workforce mix, that was one of the points we made in a report last September that just with respect to acquisition workforce, there was a focus on the civilian, but not the entire total force. And that would be something that we would hope to see as we move forward with their next plan and when we review that plan. But there are various tools the Government can use to get better insights on how they are using contractors. And Congress has been encouraging DOD for several years to come up with these inventories of their service contracts. And we have been reporting on that for the last couple years. We have identified issues of just the nature of collecting that kind of information so you know what they are doing and what you are actually paying for those activities. But there are also requirements for them to review those inventories and make these independent decisions as to what are the contractors doing. Are they doing activities that we are comfortable with? Are they doing things that we are concerned about because they are inherently governmental? Are they doing things that are closely supporting inherently governmental functions, because all those things present risks to the Government. Mr. Smith. Thank you. One final, hopefully, quick question. It is the instances where active duty in most cases or civilian personnel go from being, you know, either active duty or civilian personnel to contractor. And, you know, we have heard this complaint from our constituents. I don't know if it is an urban myth or not, but you know, you are not saving any money, you are a guy who is doing the job for a lower salary. Gets their 20 years, retires, starts getting paid that and then turns right around the next day and becomes a contractor at a higher level. And not necessarily the exact same job, but there is no question that there are a fair number of people, you know, on the active duty side, in particular, who have gone from being active duty to being contractors, obviously bringing similar skills to the table. And it just seems like you are paying more at that point. Is that a problem, or is that just something that, you know, shows up in an anecdote or two? Mr. Tamburrino, if you want---- Mr. Tamburrino. Mr. Congressman, thank you for that question. In terms of--I cannot address that particular issue, but in terms of contracted services, our approach is we do not buy individual people or we do not buy employees specifically, we buy work. We evaluate the competitive nature of the effort based on the work that is going to be performed for us. And that is what guides our selection processes. As to your specific question, I couldn't answer that without additional research. Mr. Smith. Okay. Anybody got anything beyond that? If not, that is---- Mr. Hutton. I think from the GAO perspective, one of the important things we would want--that if there was a decision that--to provide this service--is going to be provided by a contractor that the Government gets a good outcome. And that requires sufficient acquisition workforce staff to make sure that they do a sound business arrangement, that they have the sufficient oversight to make sure that the contractor performs as the contract would specify. What you point out are things that I have heard as well, but I don't have any empirical data or other further analysis. Mr. Smith. Thank you, Mr. Chairman. The Chairman. Thank you. Mr. Bartlett. Mr. Bartlett. Thank you, Mr. Chairman. Dr. Parkinson was a very keen observer of human behavior, particularly in the workforce. He observed, for instance, that work expands to fill the time available for its completion. I think you could have no better example of that than the U.S. Congress. He also noted that as an organization grew, more and more of its energies were consumed with internal communication. The larger the organization got, the more their energies were consumed with communicating with each other. And finally at some point, a different point depending on the kind of organization it was, essentially all of their energies were consumed with internal communication. They got little or nothing done. How far is DOD along this continuum? They are really big and really complex. Is it closer to 25 percent, 50 percent, 75 percent? I would just like for you to go down the line and each of you tell me how far you think DOD is along this continuum. Ms. Farrell. I think from a GAO perspective, we would be looking at how much attention has top leadership paid to strategic human capital management? And although it is cited in the 2010 QDR [Quadrennial Defense Review] of DOD that strategic human capital management is of growing interest, and a recognition that civilians are part of the total force, we do not see much communication throughout DOD about that attention, of what is it? The plan is another example. DOD has been working on this plan for several years, but it is still not complete. I don't know if that is due to a lack of communication within, but as an outsider there doesn't seem to be the attention at the leadership level to drive forward with the efforts needed to finish this workforce plan. Mr. Hutton. Likewise, as a GAO auditor, I am driven by data. And when I tackle a problem, the first thing I want to know is: What is the condition? And that would entail: What are we doing? What types of activities are we doing? Who is doing it? Are we doing it well? What types of competencies and skills do we need? And carrying it forward. But until you have that foundation and baseline, it is hard to make some kind of comparison like that. So that would be my answer. Mr. Tamburrino. Mr. Congressman, I think it is a priority for DOD and it has the attention of senior leadership such as Dr. Stanley. We are creating a total force rubric to guide us in the next budget cycle. In our efficiency reviews over the past year, a lot of emphasis was placed on low-value-added activities, overhead and administrative burden, and calibrating our workforce accordingly. And we have reinvigorated the functional community management discipline inside of DOD, so I have a senior person at the executive level responsible for every major occupational series in DOD now. And I am working with them individually to build the plan for your community. Because I do agree with the GAO. This has taken us a long time, and we need to do much better, and we are committed to doing much better. Mr. Charles. Mr. Bartlett, I would suggest to you that I honestly believe in what I do and what my organization does, that it does not exceed more than 25 percent of non-productive spinning around in circles. I truly believe we do 75 percent of real work. Mr. Bartlett. Thank you. Thank you, Mr. Chairman. I yield back. The Chairman. Thank you. Mr. Kissell. Mr. Kissell. Thank you, Mr. Chairman. And thank you, guys, for being with us today. Ms. Farrell, you were talking about earlier on in high-risk job classifications that only 3 out of 22 categories--can you expand on that a little bit? What--define ``high-risk.'' The 3 out of 22, what are the other 19? How have we gotten here, or not gotten here? Ms. Farrell. Okay, I believe there are a couple of questions in there. One, I want to make it clear that the high- risk list that I referred to is GAO's high-risk list that we started in 1990, where we surveyed programs or agencies that were subject to fraud, waste and abuse. And then later on, we enhanced that criteria to include areas of concern that needed transformation in order to be more cost-effective or efficient. Mr. Kissell. So the reason that you got on this list to be in high-risk is because of great concern is as to how the job was being done? Ms. Farrell. The reason that strategic human capital management was put on the list originally was due to lack of leadership over strategic human capital planning. That we felt there was a lack of leadership in terms of looking toward the future of exactly what skills would be necessary. There were also issues regarding developing a results- oriented culture; that you would have a line of sight of what the individual did was aligned with the organization's goals. In February of this past year, GAO shortened the reasons that strategic human capital management was on our high-risk list to acknowledging there have been significant improvements. Congress has passed legislation, for example, regarding telework. OPM [the Office of Personnel Management] has put out guidance regarding human capital flexibilities to help the agencies understand what tools were already at their disposal. But we still felt that there was a need for agencies, including DOD, and the acquisition workforce in particular was highlighted in our February report, that they needed to do a better job of gap analysis. In other words, determining what your needs are today, if there are any gaps in those needs today, what your needs are for the future and if there are any gaps. And by ``gaps,'' it is not just the numbers. The numbers obviously are important. It is important to project the trends and know what your retention and your attrition rates are. But it is also important to know that you have a workforce composed of the right skills that you need. There have been emerging needs that we have seen develop in the last decade. When you look at the medical, it is in the paper everyday about traumatic brain injury. And DOD obviously has a need for medical providers to take care and do research in that area. What we wish for DOD to do, as well as Congress, it is in line, the same criteria that we are looking at for workforce plans are actually outlined in the legislative requirements for DOD to do a better job of determining what their needs are today and associated gaps, as well as in the future. Mr. Kissell. And what was the 3 out of 22 number? Ms. Farrell. Yes, those are the 22 what DOD has termed ``mission-critical occupations.'' They are very general categories that within them contain a range of specific occupations. One is financial management; another could be medical. One is, in addition to the 22 I mentioned, acquisition management has 2 functional areas itself. These are occupations that DOD feels that it needs to do its mission. And what we are saying is when we looked at their plan of last fall, and the next plan's coming, so we are hoping to see progress, there were only--they had identified 22 mission- critical occupations. That is the start, what is your need, but of those 22, they had only done gap analysis, started those. At the time of our review, they were not completed for three. Mr. Kissell. Do you have concerns about, okay, we have identified 22 and we have got progress on 3. Do you think we have picked the right three? Or do you have concerns about how we go about picking this? Or is this the three, the path of least resistance and maybe there are two or three others that we should have done first and didn't do? Or how would you assess the 3 that were chosen, versus the process of the 19 that haven't been done yet? Ms. Farrell. Well, we would say all 22. If they feel that 22 mission-critical occupations currently exist with the skills and competencies that their workforce needs, we would want to see all 22 completed. Now, they can prioritize that and have a plan, and I believe they do have a plan. It is just that it is going to take years. Whereas, we would like to see more of a how can you go ahead and complete this earlier. Mr. Kissell. Okay, thank you. Thank you, Mr. Chairman. The Chairman. Thank you. Mr. Miller. Mr. Miller. Thank you, Mr. Chairman. Mr. Charles, if I could direct a number of questions to you. I will just make a statement and then the questions, and let you respond. In April, I guess, of 2010, the workforce strategy indicated that DOD intended to grow its workforce by some 20,000 individuals through 2015, through a combination of half new hires, half insourcing functions that were currently being performed by contractor personnel. Since the report was issued, though, the Secretary has announced a limit to DOD's budget growth and announced that insourcing decisions are now going to be made on a case-by-case basis. Number one, is DOD's intention to still grow its acquisition force by 20,000? If not, what growth do you anticipate? Number two, are there enough funds budgeted to sustain the growth? And what is the current status of DOD's insourcing initiative? I know some of my colleagues have already addressed it, but I would be interested in knowing what factors led to the Secretary's decision to limit insourcing efforts. Mr. Charles. Well, let me start from the beginning. With regard to the civilian workforce, we have 152,000 people in our workforce now. That is 134,000 civilians and 18,000 military. That number is what we wanted to have at this stage of where we are. It varies a lot. It varies a lot in military and civilian, especially since we are in more than one armed conflict and we are doing rotations with military a lot. And therefore, that puts more pressure on the civilians and more pressure on the uniformed as well. So we don't have a magic solution and we don't spin a bottle and say, ``This is the direction we are going to go at this time.'' We have plans. If we can execute them, we do. If we don't have the assets to execute, then we can't. It is a difficult--it is a difficult process. Mr. Miller. So do you or don't you anticipate continuing growth through 2015? Mr. Charles. We are going to continue growth, but it is not going to be at the rate that we have done so far. Mr. Miller. And is that for budgetary reasons or---- Mr. Charles. It is for budgetary reasons. It is for consumption of people reasons, both military and civilian. Mr. Miller. And could you just touch on what factors led to the Secretary's decision to limit insourcing efforts? Mr. Charles. Well, I can't really speak for the Secretary, but I believe that part of the reason for that is financial. Mr. Miller. That is all. The Chairman. Mr. Andrews. Mr. Andrews. Thank you, Mr. Chairman. The work that Congressman Conaway and I and our colleagues did on the defense acquisition reform panel made me want to come here today, because the work that you ladies and gentlemen are doing is so important. To put this in some perspective, the United States Department of Defense acquisition workforce will buy more goods and services this year than most of our State governments combined. Most of our State governments combined. To put it in further perspective, if they could improve their performance and we could improve our system to the point where we have a 5 percent savings in acquisition--you know, the person getting a Sam's Club membership, or a person being a little more careful by clipping coupons. If we could get a 5 percent improvement in acquisition, over 10 years that would amount to about 10 percent of the budget savings that the Congressional leadership and the President are looking for at the meetings at the White House this afternoon. This is a big deal. And one thing that Mr. Conaway and I found is that we could write all the good laws we wanted and design all the good systems we wanted and crack down on all the fraud we wanted, but we didn't have really talented, well-trained, well- compensated, well-motivated people in the acquisition reform-- in the acquisition workforce--this all wouldn't work. So I am very interested, on page 12 of the GAO document for today. Ms. Farrell and Mr. Hutton reported that in September of this year they are going to give us another update on the issues of the critical skills and competencies of the civilian workforce and gaps in that workforce. Now, not to get ahead of our September review, but if you had to name, let us say, two critical areas of gaps in the acquisition workforce--in other words, we are missing people with skills A or B--what would those two most glaring areas be? Mr. Hutton. Thank you, Mr. Andrews. And I had the pleasure of testifying before your panel---- Mr. Andrews. Did a very good job. Mr. Hutton. I would like to offer three. Mr. Andrews. That is even better. Mr. Hutton. One would be expertise in the area of pricing. I might look at the actual contracting function and the associated activities that go along with that. And the third-- gosh, I know I had three--oh, things like systems engineers and things like that are going to help with the acquisition. Mr. Andrews. Let us briefly walk through those three things. What do you mean when you say ``pricing''? Do you mean people with experience in a given marketplace who could tell a good deal from a bad one? Mr. Hutton. I would say that. Also, you have the auditors, like DCMA [Defense Contract Management Agency], DCAA [Defense Contract Audit Agency], that provide a function to support the acquisition community, whether it be in contract administration, or in supporting a contracting ops, or in things like looking at proposals and doing analyses of the contractors' proposals and things like that, that auditing function---- Mr. Andrews. What about pricing information? One of the astonishing anecdotes which came out of our review was that the Navy had bought a refrigeration system for I want to say $14,000, and 18 months later bought precisely the same system for $37,000. And the main reason was that the acquisition official did not have a database in front of him or her that let them see what we had paid for it a year-and-a-half-ago. Have we made strides in improving transparency of that information for our buyers and decisionmakers? Mr. Hutton. I can't speak to that specific issue, but I do believe that if that was a recent example, and given the challenges the acquisition workforce has across the board, I would suspect that if there was any progress, it was incremental---- Mr. Andrews. Now, when you say contracting functions, what does that mean? Does it mean access to lawyers who know how to draft good contracts? What does that mean? Mr. Hutton. I am thinking of things like the contracting officers, contract specialists, people that support the development of things like statement of work and, you know, some of the contract administration functions. Mr. Andrews. And finally, let me ask you, one of the things we wanted to do is create a career path for our uniformed personnel, where excellence in the acquisition field was rewarded with appropriate promotion and opportunity. Do you think we have made any progress in that area? Mr. Hutton. I am sorry, Mr. Andrews---- Mr. Andrews. Our uniformed people. Very few of our uniformed people want to go into acquisition as a career---- Mr. Hutton. Right. Mr. Andrews [continuing]. Because the rewards are not so great. Mr. Hutton. Right. Mr. Andrews. We want to fix that and make it a desirable area. Have we done any progress on that? Mr. Hutton. It is hard for me to say, because it is my understanding of the most recent acquisition workforce plan that came over here were focused largely on civilians and less so on the military and the contractors. But---- Mr. Andrews. Thank you. Thank you. Mr. Chairman, if I may, that is one area I think we do want to focus on, is that this is a joint effort between our civilians and our uniformed personnel. We want to be--Mr. Conaway put it in that law, as we did--we want to be sure that a good career path for a uniformed person is this as well. Mr. Thornberry. [Presiding.] Yes. Mr. Andrews. Thank you. Mr. Thornberry. I think the gentleman makes a great point. Mrs. Hartzler. Mrs. Hartzler. Thank you. Thank you, Mr. Chairman. I wanted to follow up, Ms. Farrell, on your opening testimony, and also my colleague Mr. Kissell's question. I think it was the same area. You identified 3 areas out of 22, I believe, that you share are needs, language, logistics and information technology. Is that right? Ms. Farrell. Those were 3 areas that DOD had started their gap analysis on, of their 22 mission-critical occupations. The occupations that they had designated as mission-critical. Mrs. Hartzler. Okay. Very good. I wanted to ask Mr. Tamburrino, do you have problems filling open positions right now? And if so, what are those positions and why do you think, if you do have problems? Mr. Tamburrino. Madam Congressman, thank you for that question. We don't have problems filling our vacancies right now. There are many, many applicants for all of our jobs. That our challenge is to respond to the GAO is absolutely right. They have asked us to do critical skill gap analysis. That takes quite a while. And I am obligated to find a way to do that quicker. We want every person that comes to work for us to know from the day they start at the entry level until they go to the most senior level, this is the career path they can expect to follow, these are the functional skills we expect them to accrue, and these are the proficiency levels we expect them to have. That takes a lot of intense management. And we are making progress across more than three areas in that, but we agree we have to do a little bit more to show due diligence here. Mrs. Hartzler. How long do you think it would take for just, say, one of these jobs, say, let us take logistics, to rise in proficiencies and to the skill levels that you need? Mr. Tamburrino. It takes dedication of senior leadership and several subject matter experts. I think it takes on the order of--I would have to go back and check--but it is on the magnitude of months. But then there are surveys that we use with OPM to assess those, and we assess the entire workforce for what they actually do when they go to work in the morning, what skills, knowledges and abilities they use. Those are much more complicated and they take quite a while, and we are working with OPM on how to make that quicker, because those are complicated surveys at the detailed level of what a person does on a day-to-day basis. Mrs. Hartzler. Well, I am a small-business owner with my husband, and I have written job descriptions before, and I know this is beyond a job description. But it is hard for me to fathom and understand why it would take months to basically write a job description. It seems like the DOD needs more business-minded people and more business experience. Mr. Tamburrino. Yes, ma'am. Job descriptions are part of it. These are getting down to the skills they need, what training they need to accrue those skills, and what proficiency levels they must demonstrate. So we can write the job description pretty quickly, but getting to what does the person actually need to do when they sit at their desk, it almost varies by what service they are in and what occupation they are doing. So we have several communities that have done a really excellent job--financial management community is a good place, logistics is a good place--but it has taken them a long time to take the general domain of financial management and parse it across all the functions a financial manager does in the Federal Government. There are dozens of functions they do. Mrs. Hartzler. Do you presently have targets set that with these skill levels we want to have this done by October, we are going to have this skill set description done by November? Is there end-date goals that have been set on these things? Mr. Tamburrino. I would like to take that specifically as a research question. Some there are, some we have to develop them. So I would like to get back to you on that. [The information referred to can be found in the Appendix on page 83.] Mrs. Hartzler. Yes. Because I think that is important in goal setting to get things done, rather than just say we need to do a better job, or we--down the road we need to do it faster. Yes, Ms. Farrell. Ms. Farrell. In our February 2009 report for Mr. Tamburrino, and it is one that I was referring to, and we would be happy to discuss these issues, we did make a recommendation that DOD develop a performance plan to help them move forward in the development to meet all of the legislative requirements. And we agree, if there is a--if it is going to take years to do all 22 mission-critical occupations, then what is the plan? And it is quite involved, as Mr. Tamburrino said. It is identifying the skills, that is the first step, but then identifying, well, do you have needs today that are beyond what you have on board, besides what you need in the future? And it is from that that you develop your gap analysis. And, again, we keep coming back, the gap analysis is critical to have a road map to determine how to recruit, how to develop your people, how to train them. And those strategies must be flexible so they can adjust with emerging needs. Mrs. Hartzler. I would just say, my final comment, this needs to be done quickly, or else by the time you get done the skills will have changed that you need, and then you are just doing a perpetual loop. So thank you. The Chairman. Thank you. Mrs. Davis. Mrs. Davis. Thank you, Mr. Chairman. And I am sorry that I missed your testimony earlier. And I am trying to understand better what the appropriate mix of military, civilian and contractors are, and whether you could take that into an example, perhaps? I am sure this varies greatly by what people are doing, but I am also wondering if there are some general ways of looking at that, and whether there is some assessment, sort of understanding and analyzing how that worked--you know, whether the skill sets that people bring are different, whether accountability measures are different for someone who is a civilian employee versus a military, oversight functions and as well as contracting? Obviously a contractor can be fired, I would assume. I don't know what their contract might say. But how does that work together? And what issues do you see around that? Does--and what do we learn if we really try and study that? Has it been, and under what circumstances? Mr. Hutton. First, I would like to say that GAO has done a lot of work in this area, but I have to preface my comments by saying it is hard to come up with a magical ratio of appropriate mix. We have done a lot of work looking at the use of, say, contractors as contract specialists, just to use an example. If you are in a--and that is considered a closely supporting an inherently governmental function. From the work we have done, it is important that when an agency decides they want to use, say, a contractor for that type of activity, they have got to stand back and say, ``Okay, what is it exactly we want that contracting--contractor to do? Are we going to ask him to write statements of work?'' If you are going to write statements of work, what implications does that have downstream in terms of organizational conflicts if they are from a firm that wants to bid on that contract? Just to illustrate the point. If it is something that might be more plain vanilla of a contracting support, like supporting some administrative function or something like that, you still might want to ask yourself--and you should ask yourself--``Okay, if I ask the contractor to do that, they are going to be providing an input to some Government official eventually that is going to have make a decision. Will that Government official know that that came from a contractor?'' If not, that presents risk. Will that Government official be properly trained to understand the implications of what they are asking the contractor to do? If not, that is going to present risk to the Government. And in those situations, when you are getting into risky and riskier situation, you are putting the Government at risk of losing Government control and accountability over its decisionmaking. So there is no magical ratio, but I think that you have to look at each individual decision. But to start, though, I think you still need some kind of strategic vision as to what you do or you may not want contractors to do for policy reasons. Mrs. Davis. Are there decisions made as well that I think would indicate over time that that is a function that should be brought, essentially, in-house? I mean, if we don't have those--those skill sets. I am thinking, even about, you know, medical needs within the military going out to the civilian workforce and then eventually having to contract, because those skills aren't there. Clearly, in the world that we live in today, we don't have all the people that we could have in any of the services. But I am just trying to get a handle, I think, on that decisionmaking process and at what point those questions are asked, whether, in fact, truly, those skills are not in-house? And, again, what--what the accountability is and how that differs in the way jobs are delivered themselves? Mr. Hutton. Well, I will try to be brief. But I don't want to steal the thunder of DOD. Perhaps they have a view. But I still think you need a strategic vision and view of how you want to use--and in this case, we are talking about contractors. Congress has been pushing and urging the agencies to provide these inventories of service contracts. That is the first step. That is just getting a basic understanding of how we are using contractors, to what extent we are using contractors, and then looking at them on an individual basis and saying, ``What do we ask them to do? And are we okay with that or not?'' Is it an enduring need, is it episodic, is it expertise? I mean, all these different factors come into play. But I think the inventory process ultimately is a tool that may help the agencies, and particularly DOD, get a better handle on that workforce mix that you are talking about. Mr. Tamburrino. Madam Congresswoman, thanks for that question. The mix between the military, civilian and contractor, as you said, is almost local. What is the mission on the ground for that local commander, and who does he need to perform that mission in terms of skill sets? I think if you are at the waterfront or on the ground deployed, it is principally military. And we understand that. If you are at a systems command or a buying command, I submit you are going to find mostly career civil servants, because that is an enduring proposition that needs a deep skill set in systems engineering, contract management, logistics management, financial management. The decision to award a service contract is generally predicated on we are not going to need that skill set for an enduring period, so let us just buy the packet of work we need that--for that given moment in time. Or, we just don't have that skill in the Government and we don't need that skill in the Government on an enduring basis. And that is how I think most local commanders go about making that decision. And I agree with the GAO. We take seriously this annual service contract inventory. And Dr. Stanley is putting a lot of emphasis on the amount of analysis that is going into that every year, so we can make an informed decision of what needs to stay inside the Government, because it is inherently governmental, or closely aligned that way, or more cost- effective that way, and what can we take into the private sector, because that just represents a proposition we are able to deal with at that point in time. The Chairman. Mr. Wittman. Mr. Wittman. Thank you, Mr. Chairman. I would like to thank the witnesses for joining us today. I appreciate your efforts and your enlightenment into what I think is probably one of the more challenging aspects of what all of us are going to have to deal with going in the future, especially in days of what I call resource challenges. So let me ask this. I am going to pick up from where Mrs. Davis left off, and that is the whole idea of the proper mix, in which you look in the military, if you look at uniformed services, civilian and contractors, there has been a lot of back and forth, from insourcing to outsourcing and trying to find that right balance. And just as many of you have spoken about, it is trying to find out which fundamental elements the Government truly needs somebody in a Government position, where do we have a need elsewhere? I want to make sure that there is the right balance there. The key, I think, going in the future is to have the adaptability and flexibility in workforce to meet changing needs. And let us face it, we are in a pretty dynamic world and a pretty dynamic area of resources. If we can't redirect pretty quickly to meet those needs, that is going to hurt us. And it also adds to cost. And I think it takes away from our ability to be really efficient. Can you give me some indication, as we go down the road-- and there has been a lot of back and forth, as you know, in the whole debate about insourcing versus outsourcing, a certain number of positions being converted to the Government side. Can you give me an indication about where you believe we need to be, and are we there with the construction of our Federal workforce as it relates to defense matters? And, if we are not, what do we need to do to make sure we have that right mix and that we can be flexible enough in making decisions in a fairly short timeframe to make sure we have that right mix of human capital? Mr. Tamburrino. Mr. Congressman, thanks for that question. I think the Department of Defense efficiency initiatives launched us down that pathway. I think we were directed to critically examine our mission, prioritize mission sets, and rid ourselves of functions we did not--we did not have a need to do anymore, because, as you said, we are headed into a resource-constrained environment. So it is a matter of each component looking at that mission set, deciding what is important, making that very critical decision of what they are not going to do anymore in a resource-constrained environment because it is duplicative, it doesn't add value, or it just doesn't fit with what we are being told to do as the Nation's Armed Forces. And after that, it is literally making sure that the Government has the core capabilities it needs to be an intelligent buyer of goods and services. And that is very enduring. And I think that is the point of the annual inventory of contract services. So I couldn't tell you where the balance point is, other than I can tell you it is a critical focus right now to try and figure that out and develop some kind of analytical tool that would help us predict that on an ongoing basis, which we--we don't, frankly, have right now. Mr. Wittman. Well, let me ask you this, on a scale of 1 to 10, 10 being where you would like to be in a perfect world, where do you believe you are on that continuum of creating that right mix of workforce in human capital? Mr. Tamburrino. Sir, I think we have been working the strategic human capital plan for 3 years. Each year we have made progress. I think now we really do have a good sense of where we want to go. So I would say I am right in the middle. I have a good basis. I think we have done a great job with the acquisition workforce. I think we have done an exceptional job with our senior executives, the 1,300 or 1,400 of those in the Department. And those are good launching pads. And I think several of our communities--financial management, logistics and medical--are in very good standing. So I think we have a good line of sight of where we have to go right now. Mr. Wittman. Could you give just some indication, a timeframe, about when you think you would ultimately get to where you would like to be or where you need to be? Mr. Tamburrino. Sir, as I said in my oral statement, I have kind of benchmarked 2015 as the--as being done. It is a large workforce. It is 780,000 people, spanning greater than 600 unique job series. So it is--it has got a large number of moving parts. But I have a tremendous obligation to get this right, and I take that very seriously. Mr. Wittman. Very good. Anybody else on the panel like to add their thoughts on that? Ms. Farrell. Ms. Farrell. We agree with Mr. Tamburrino, but the very first thing, before you start talking about how you use these tools, such as insourcing and outsourcing, is to determine your needs. And we keep going back to the first step is to assess your existing needs, and assess what you need for the future as well as what my colleague has pointed out about the inventory with the contract services. But first develop this, assess what your needs are, then look at what tools you have and what should be inside DOD and what should be going outside. Mr. Wittman. Thank you, Mr. Chairman. I yield back. The Chairman. Thank you very much. Mrs. Hanabusa. Ms. Hanabusa. Thank you, Mr. Chairman. Let us continue along those lines, Ms. Farrell. On page 6 of your report, you make a reference to basically the DOD has to provide a metric for measuring progress toward DOD's goal of having a mission-ready workforce. I guess this reminds me of another hearing that we had when we were going over the 30-year shipbuilding plans of the Navy. And we happened to have three graduates before us of the Naval Academy, all graduated the same year, and it was 36 years ago. So I asked them, ``From where you sit today, would you have guessed 30 years ago what your needs were?'' And of course, they said, ``No.'' I mean, you know, it is a dynamic process, and it is one that changes. I am not defending the DOD, but the thing is that if you are holding them to a criteria of a mission-ready workforce, how are you going to know--how are they to know what the mission is going to be like 5 years, 10 years from now? And I can tell you, I represent Hawaii. Who would have thought that we would have gone from a conventional type of military to Strykers, all within a period of 5 years? How are they to know? And what I also want you to answer to me is it seems like if this requirement is put upon them and they can't project it, you are almost seem to be proposing outsourcing, because then you don't have to have a military-ready or a civilian workforce that can address things if you don't know what the mission is going to look like. I think we have seen in the past 10 years how different this mission is--if you can comment to that? Ms. Farrell. Sure. I think it is DOD that has made the statement many times that you have a plan to make a plan. And we emphasize that the strategies contained in their workforce plan when they develop them to meet their needs, needs to be flexible in order to address emerging needs. It is actually the legislative requirement that mandates that DOD look forward 7 years, starting with the year after they submit their workforce plan to Congress. It used to be 10 years. And there is a lot of debate about how far forward can an organization be without losing some sense of reality and just along the lines of what you are saying. But there are emerging needs. Again, I will use my example that I had earlier of traumatic brain injury that developed and kept growing. And that was an emerging need several years ago, and it was the kind of need that needed to be built into the medical plan in order for the people to have the right medical provider. So it is--there are emerging needs that when, like Mr. Tamburrino talks about surveying for the existing. It is also a lot of knowledge about here is what is starting to break through. There is going to be issues for DOD in the future. Ms. Hanabusa. I understand that, Ms. Farrell. And I understand that Congress in its wisdom thinks we are doing the right things a lot of times. So that is why we have you doing reports to tell us, you know, ``You are off the mark.'' If you think that, you know, we are asking the DOD to do something that it can't do, you know, you should point it out. But it still begs the issue, which is that to define a mission-ready--I can understand a trauma situation like that, but let us talk about mission-ready. Basically what type of workforce are we going to need, for example, for the shipyards, for anything else into the future, when we are changing what they need to have the skills for? So civilian, for example. We may need welders today, but who knows whether that technology is going to change in 5 years. And what do we do? Should there be a component of retraining? Should there be an assessment? What is it that when you say ``mission-ready workforce'' that you expect the DOD to be able to do when you made that statement? Ms. Farrell. I think that was their metric that they were using, saying that they would have the---- Ms. Hanabusa. But you're judging---- Ms. Farrell. But again, we believe in metrics. Whether it is congressionally mandated or not, we would believe that they need to have metrics for what they are trying to achieve. And we would believe that they need to look forward about their future workforce and what those needs are. Ms. Hanabusa. And that is my question. How do you determine, or how, in your mind, have they looked to the future workforce when we may not know what that future workforce is going to be like? You are almost like telling them--like the 30-year plan. It is like, okay, just put something out there and say if they did that, would they satisfy the, ``metric'' by saying ``this is what we think it is going to be like and this is what we are doing''? Ms. Farrell. Well, again, we would want an assessment. Ms. Hanabusa. Thank you, Mr. Chair. The Chairman. Thank you. Mr. Reyes. Mr. Reyes. Thank you, Mr. Chairman. And thank you all for being here. And I apologize for not being here earlier, but we have these conflicting schedules here. Having had the experience of serving in the Border Patrol and being a chief in the Border Patrol back in the 1980s when the A-76 program first came out, and wanting to test the concept of contracting out services because it was going to save money. And having gone through that, which conclusively proved that it did not save money. We were a law enforcement agency, so we had a requirement of 24 hours, weekends, holidays; it didn't matter. We found out very quickly that we were limited in terms of after hours, because it would affect the budget that had been set up for the A-76 contract. We were limited in terms of vehicles, patrol vehicles that broke down unexpectedly, and we would have to wait until the contract hours kicked in, which were normally between 8 and 5 during the day, which meant we had to make a decision whether or not we left the vehicle in isolated areas where it could be vandalized or compromised or some other way. So there are many, many issues like that, that came up in that process that we quickly determined, hey, A-76 may work someplace else, but it sure doesn't work in the law enforcement area. Having had that experience and then having gone through the experience of largely contracting out huge portions of the effort in Iraq and to a lesser degree in Afghanistan, I think, at least my opinion, what I have learned throughout--through this process--is that contracting out isn't all it is cracked out to be. And then I tried to mitigate that with my experience when I was in the Army, having had to pull K.P. [kitchen patrol]. It would have been nice to have contracted out the kitchen duties and all of those kinds of things. So in today's world, with the kinds of challenges that I think members have articulated here, and the kinds of things that we are trying to do to try to maximize efficiency and hold down costs, it really is a guessing game, because we don't know what requirements of the workforce are going to be in 3 years, 5 years, or 10 years. So studies done about the things that have worked and the things that haven't worked where there has got to be a balance or a mixture of Federal employees to contract employees is very important. Mr. Chairman, I know you and I have discussed it, that we don't want to just jump off and do, without making sure we know exactly, or at least we think we know what the results are going to be. But it is always important to look at history to be able to make those informed decisions. Being a 26\1/2\-year Federal employee, obviously I have great respect for the institutional knowledge, the dedication, the professionalism that Federal employees bring to the process. Nothing against contract employees, but they have-- Federal employees have a vested interest in the career, where they are counting on--where they are counted on--to carry out the mission, wherever that mission takes them. In today's world, the other thing we have to consider is that we are facing asymmetric threats that make it necessary for DOD and intelligence to work closer and closer together, which makes it imperative, I think, that we put in the mix the kinds of duties that would be risk jobs--high-risk jobs--that can't be done readily by contractors. So I hope all of these things we can take into account. I definitely want to thank you for the work that you do in this area, but I think we are a long ways from finding that right balance or that right combination. I think there is much more work to be done, so I hope we are able to continue in a much slower pace so that like that old rule of the carpenter, ``measure twice and cut once,'' because it is expensive if you don't. We learned that in the Iraq war. Thank you, Mr. Chairman. And thank you all again. The Chairman. I am still trying to find out why you wanted to contract out K.P.? [Laughter.] Mr. Reyes. Oh, because I hated getting up at 3 o'clock. The Chairman. Start peeling those potatoes. Well, we didn't run into the problem I was concerned about. The members all had an opportunity to ask their questions and still make their votes. So thank you very much for being here. And with that, the committee will stand adjourned. [Whereupon, at 2:23 p.m., the committee was adjourned.] ? ======================================================================= A P P E N D I X July 14, 2011 ======================================================================= ? ======================================================================= PREPARED STATEMENTS SUBMITTED FOR THE RECORD July 14, 2011 ======================================================================= Statement of Hon. Howard P. ``Buck'' McKeon Chairman, House Committee on Armed Services Hearing on Human Capital Management: A High-Risk Area for the Department of Defense July 14, 2011 Good afternoon, ladies and gentlemen. Thank you for joining us today as we look at the Department of Defense's human capital planning efforts. Unfortunately, because most of the Federal Government, particularly DOD, has done such a woeful job in this area, it landed on GAO's high-risk list in 2001. After 10 years, it is still listed as high risk. Improvement in DOD's management of its strategic human capital resources is an absolute must. As the Defense Business Board pointed out, we have active duty military serving in positions that might otherwise be suitable for civilians. This could result in a serious misapplication of the special training and skills of our Armed Forces. In contrast, too often we have seen contractors serving in positions that should be staffed by civilians or military. The potential for waste and mismanagement is enormous when one considers the 718,000 DOD civilians and the several thousands of private sector contractors. Recognizing this, Congress mandated that DOD conduct a thorough analysis of its manpower requirements, and develop a strategic plan of action for shaping its civilian workforce to address shortfalls in critical skills and competencies that affect performance of DOD's operations and the readiness of its forces. The analysis isn't about insourcing versus outsourcing. These are just planning tools, like military to civilian conversions, to ensure the appropriate element of the workforce--be it military, civilian or contractor--is being used and that adequate oversight is in place. I believe this is simple common sense, so I find it disheartening that Congress actually had to step in and require this analysis because DOD paid little or no attention to something so logical, and so critical, as workforce management. This is particularly true in the area of acquisition management where a continuing shortage of trained acquisition personnel impedes DOD's capacity and capability to oversee its increasingly complex contracts. As GAO noted in its 2011 high- risk report, ``The lack of well-defined requirements, the use of ill-suited business arrangements, and the lack of an adequate number of trained acquisition and contract oversight personnel contribute to unmet expectations and place the Department at risk of potentially paying more than necessary.'' Over the past several years, Congress has provided the Department with various flexible authorities aimed at improving the Department's acquisition workforce. However, on a broader workforce level, we were informed last year that several significant manpower policies were on the verge of being signed out. But to date, we have seen nothing. Instead, arbitrary decisions are being made without sufficient analysis being conducted or guiding principles in place. As a result, the committee has included several provisions in this year's authorization bill to force a more effective human capital planning and total force management approach. An improved manpower requirements determination process should ensure that DOD has the right people, with the right skills, doing the right jobs, in the right places, at the right time. Again, that is just simple common sense. Statement of Hon. Adam Smith Ranking Member, House Committee on Armed Services Hearing on Human Capital Management: A High-Risk Area for the Department of Defense July 14, 2011 Thank you to all our witnesses for appearing here today to discuss strategic planning for the Department of Defense's most valuable resource: its military and civilian workforce. While I recognize that the focus of today's hearing is management of DOD's civilian workforce, I intentionally included our military members in my first statement because what we would like to see is a strategic workforce management plan that covers the Department's total force--its military, civilian Federal employees, and contractor personnel. Simply put, as GAO has stated, the Department needs to have ``the right people, with the right skills, doing the right jobs, in the right places, at the right time.'' I understand that the Department of Defense is dealing with extreme budgetary challenges. Arbitrary hiring freezes or manpower reductions in the absence of a requirement-based strategic plan for managing the workforce are counterproductive. Requirement-based manpower planning should allow the Department to reshape the workforce and achieve necessary savings without negatively affecting mission attainment. As you note in your testimony, Mr. Tamburrino, the global security demands placed on the Department will not abate just because resources are constrained. The Department must structure a total force that allows you to successfully execute the full range of missions in the National Defense Strategy at prudent levels of risk, and achieve the best possible return on investment. One area where the Department can better leverage that return on investment and, as Mr. Charles noted, increase its buying power and deliver on efficiency and affordability is through the regeneration of its acquisition workforce. The Congress bears responsibility in this regard, because we mandated the downsizing of the Department's ``shoppers'' in the 1990s. The void of expertise this downsizing created has resulted in situations such as one we learned of this week, where the DOD Inspector General assessed the Air Force spent $94.3 million on eight contracts ``that constituted work so closely supporting inherently governmental functions as to create significant risk that the contractors could influence or direct decisions that are not in the best interest of the Air Force.'' This work included developing and recommending policy changes, governing, strategic planning for the Air Force, creating and submitting budget requests, and evaluating other contractors' cost proposals. The Department must maintain a core acquisition capability and continuously improve acquisition outcomes to ensure our warfighters always have the decisive edge. So I am pleased to see that the Department has reversed the decline and is filling positions, adding some 8,600 personnel to date of the 20,000 positions announced. At the same time, the Department must apply the same rigor in analyzing, costing, and validating its requirement for contractor support. A memorandum issued June 11 by former Defense Secretary Gates confirms an inconsistency in the Department's approach to filling workforce requirements. The memo directing targeted levels for combatant command manpower billets for the next three years requires that any growth in civilian and military manpower be requested through the Joint Manpower Validation Process. I would agree with our friends from the Federal employee unions that it is indefensible for DOD to require formal justification of civilian manpower requests at the same time it is not reviewing commercial functions--or even inherently governmental functions--for insourcing and when the FY12 budget request significantly increases spending on service contracts. 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HARTZLER Mr. Tamburrino. Yes, the Department has developed competency models which include the tasks, skills, knowledge, and abilities required in an occupation and grade level. The Department is now working on a plan to expand functional communities and develop competency models to cover all the major occupations in the DOD workforce by FY 2015. In addition, efforts are underway to develop and implement tools for DOD-wide competency assessment and workforce forecasting and analysis. These tools are needed to facilitate more comprehensive workforce planning across the Department. The goal is to complete these projects and achieve a Department-wide competency gap assessment and strategic workforce plan for closing critical competency gaps by FY 2015. [See page 18.] ? ======================================================================= QUESTIONS SUBMITTED BY MEMBERS POST HEARING July 14, 2011 ======================================================================= QUESTIONS SUBMITTED BY MR. MCKEON Mr. McKeon. In briefings the committee staff had with DOD Personnel and Readiness last year, the staff was informed that P&R was on the verge of issuing several new policies related to total force management and manpower management as well as on the contractor inventory (to leverage the Army inventory model). To date, we have seen nothing. How can P&R and the Department properly fulfill their total force management responsibilities in the absence of these policies? These policies supposedly were ``imminent'' so what has been the delay-- almost a year in some cases? When will these policies finally be implemented? Mr. Tamburrino. In light of shifting mission requirements and current fiscal constraints, our goal is to ensure that policies meet not only the letter but the intent of the law, and also support the operational needs of our commanders and the management requirements of decision makers. To that end, memoranda directing and/or facilitating the implementation of recent statutory changes have been signed out to various organizations across the Department in the past six months. Currently, these policy memorandum and guidance documents are in various stages of coordination across the Department. As those policies are issued, they are disseminated across the Department and will be made available to the Congress when complete. Mr. McKeon. The DOD IG has released reports noting that the Army and Air Force have inappropriately outsourced inherently governmental functions. This is very disturbing since it puts the Government at tremendous risk of waste, fraud and abuse. What is the Department doing to rein in misuse of contractors in these instances? Mr. Tamburrino. In order to minimize the potential risks, the Department is committed to meeting its statutory obligations under Title 10 (sections 2330a, 2383, and 2463) to annually inventory and review its contracted services, identifying those that are inappropriately being performed by the private sector and should be insourced to Government performance. This review includes not only those services that are identified to be inherently governmental in nature but also those that are determined to be so closely associated with inherently governmental functions as to reasonably warrant Government performance. Some of these services may be determined to be no longer required or of low priority, and as a consequence may be eliminated or reduced in scope, while others may be identified for insourcing. Others may appropriately continue to be contracted for but require additional Government oversight and control to minimize the risk of fraud, waste, and abuse. Those contracted services that meet the necessary criteria (consistent with governing statutes, policies, and regulations) will be insourced to Government performance. Mr. McKeon. Are there going to be civilian reductions-in-force (RIF) because of the billet freeze? In a RIF, people already near retirement stay and the younger employees go. As such, the skills you may need are not necessarily the skills you retain. Given the magnitude of reductions you may need to make to meet the billet freeze, how will that affect the long-term viability of your mission, and retention of the right civilian and contract skills mix? Mr. Tamburrino. Until all reviews are completed and organizational efficiencies fully implemented, projecting potential RIF actions in the future would be premature. The Department is committed to its civilian workforce and uses all possible personnel tool/processes available to avoid the potential for involuntary separations. The current guidance is to maintain FY10 civilian funding levels, with some exceptions, for the next three years. This direction was implemented in conjunction with organizational assessments and mission/function prioritization. DOD organizations, military departments and defense agencies continue to review their workload and staffing (military, civilian, and contracted services), identifying low priority or marginal value functions for elimination. As part of these reviews, resources/ personnel may be realigned/reassigned to minimize potential adverse personnel actions, such as reductions-in-force (RIF), with some RIF notices . In instances when and where appropriate, organizations have requested and have been granted relief from FY10 funding levels to meet critical workload requirements and ensure appropriate workforce mix and skill allocation. Mr. McKeon. Historically, civilian personnel freezes have led to increased contracting out. The work still needs to be done and if civilian employees cannot be used, then contracts will be awarded instead. What mechanisms are being put into place to ensure that contractors will not be substituted for civilians? Mr. Tamburrino. The Department remains committed to meeting its statutory obligations under 10 USC 2463, which requires special consideration for using DOD civilian personnel for new or expanding work. This consideration regarding DOD civilian personnel is consistent with applicable policies such as those regarding cost, ``Estimating and Comparing the Full Costs of Civilian and Military Manpower and Contract Support'' (as updated in October 2010), and the Department's workforce mix criteria, to include risk assessment and mitigation, in DOD Instruction 1100.22, updated April 2010. While current direction to DOD Components is to hold (through FY 2013) to FY2010 funding levels for civilian personnel (with some exceptions), DOD components are also being asked to reduce/eliminate lower priority activities and streamline those that remain. New/ expanding work requiring civilian performance may be performed by existing personnel by refining existing duties or requirements; establishing new positions by eliminating/shifting equivalent existing manpower resources (personnel) from lower priority activities; or requesting an exception to the civilian funding levels. Mr. McKeon. Please discuss the contradiction between the Department's 2009 human capital strategic plan which stated that civilian senior leader requirements would increase by 400 positions by 2015 and the Secretary of Defense's expectation that the Department would eliminate at least 150 senior leader positions over the next two years. Mr. Tamburrino. In the 2009 report, 240 immediate needs were identified and 400 additional Senior Executive Service (SES), Senior Level (SL), and Scientific and Technical (ST) requirements were projected by 2015 based on mission requirements. At that time, the Department was growing considerably with emerging requirements. However, in FY 2010, the Department conducted a comprehensive review of its Civilian Service Executive cadre in order to eliminate positions that were not aligned with DOD's current mission set. After concluding this review, the Department then identified 209 Civilian Senior Executives (to include Defense Intelligence Senior Executive Service (DISES) and Defense Intelligence Senior Level (DISL) positions) to be eliminated, combined or downgraded. Mr. McKeon. Secretary Gates told The Washington Post that Federal employees were 25% less costly than contractors. He also stated that insourcing hadn't realized the savings he had hoped for. The Department has reported to the Congress that in the past year significant efficiencies have been realized through insourcing. Can you please reconcile these statements? Mr. Tamburrino. Yes. As a result of insourcing, in the fiscal year 2010 budget, the Department made reductions to specific categories of contracted services dollars. In the budget for fiscal year 2010, the reduction associated with insourcing contracted services was $900 million. However, elsewhere and outside of insourcing, the funding allocated to contract services varied. The growth in all contracted services for FY2010 was more than $5 billion, resulting in a net $4.1 billion of growth in contracts. This was the context for Secretary Gates' remarks. DOD components have found that they can generate savings or efficiencies through insourcing certain types of services or functions. These savings are generally not visible at a macro DOD-wide level and materialize in the form of resource realignment at the individual Component or command level to other priorities or requirements. ______ QUESTION SUBMITTED BY MS. BORDALLO Ms. Bordallo. In the current constrained fiscal environment, do civilian personnel limitations imposed by the efficiency initiative essentially limit insourcing, even where civilian performance is demonstrably more cost efficient than continued contract performance or where the work is inherently governmental or closely associated with inherently governmental? Mr. Tamburrino. While current direction is to hold to FY10 civilian funding levels (with some exceptions) through FY13, this does not preclude the Department from rebalancing the workforce and aligning work to the Government workforce that is more appropriately performed by civilian employees. The Department remains committed to meeting its statutory obligations under Title 10 (sections 2330a, 2383, and 2463) to annually inventory and review its contracted services, identifying those that are inappropriately being performed by the private sector and should be insourced to Government performance. This includes services that are:inherently governmental or closely associated with inherently governmental in nature; may otherwise be exempted from private sector performance (to mitigate risk, ensure continuity of operations, build internal capability, meet and maintain readiness requirements, etc); require special consideration for Government performance under the provisions of 10 USC 2463; or can be more cost effectively delivered by the Government, consistent with the Department's statutory obligations under 10 USC 129a and based on a cost analysis. Those contracted services that meet the necessary criteria (consistent with governing statutes, policies, and regulations) will be insourced, by: absorbing work into existing Government positions by refining duties or requirements; establishing new positions to perform contracted services by eliminating or shifting equivalent existing manpower resources (personnel) from lower priority activities; or on a case-by-case basis, requesting an exception to the current civilian funding levels. ______ QUESTIONS SUBMITTED BY MR. FORBES Mr. Forbes. How can the Department of Defense adequately ensure synchronization between separate and discrete military, civilian employee, and contractor decisions and ensure that alleged savings from reducing one category of manpower are not offset by increases in other categories of manpower, in the absence of P&R policy and any active role in the efficiencies process? While we applaud the objective of finding efficiencies, we fear the effort could fail precisely because of this absence of a total force management perspective and P&R activity, a vacuum that seems to be filled by uncoordinated Comptroller, CAPE, and efficiencies task force actions. Mr. Tamburrino. Across the entire Department, improvements to the Total Force management of our active/reserve military, Government civilians, and contracts for services is critical if we are to control personnel costs as a share of the budget. We are changing how we strategically look at the Total Force, both as we execute our mission and plan across the FYDP. We must start at the beginning by carefully assessing ``demands'' for manpower, rigorously determining which should be funded and then how (active/reserve military, civilians, or contracts). To that end, memoranda directing and/or facilitating the implementation of recent statutory changes have been signed out to various organizations across the Department in the past six months. Total Force Management requires a holistic analysis and prioritization of the work to be done, and the identification and investment in the most effective and efficient component of the workforce to best accomplish the tasks to deliver the capabilities and readiness we need. The cost of military, Government civilians, and/or contractors depends greatly on individual facts and circumstances. Given that, we must do more to objectively analyze not only the demands for manpower but, if appropriate to resource, what the best ``Total Force solution or mix'' might be. Additionally, the separate decisions that affect each component of the Total Force must be better synchronized to achieve the desired outcomes and balance operational, fiscal, and acquisition risks. Our work must not only include the development and promulgation of policies, but we must also ensure the Department provides managers with the tools, resources, training, and information necessary to achieve the outcomes we desire in this increasingly austere fiscal environment. Lastly, our current business processes must be better synchronized if we are to achieve a more appropriate balance in our workforce, aligning inherently governmental activities to military and civilian workforces and commercial activities to the most cost effective service provider-- be that military, civilian, or contracted support. Mr. Forbes. What steps is the Department taking to improve the visibility of contracted services and ensure that such services gets the same oversight that are currently afforded to the military and civilian workforce? Mr. Tamburrino. The Department is refining how we inventory contracted services, to collect the actual direct labor hours and costs related to a specific task, as opposed to estimating contractor full time equivalents based on the dollars obligated for an entire contract (which also includes overhead and profit for the private sector) in accordance with Congressional direction and Title 10 requirements. In the past year, the Department has supported increased visibility into contracted services by improving the utility of the Inventory of Contract Services (ICS) and establishing related management mechanisms. This includes: expanding the ICS' level of detail, adopting a uniform taxonomy across DOD that organizes Product Service Code (PSC) functional groups into mission categories, and installing senior service managers to manage contracted services by portfolio. In general, we purchase services, as opposed to specific numbers of employees, from private sector firms. It is not appropriate or accurate for DOD to ``count'' contractor employees for the purposes of oversight or workload accounting. However, it is critical that we understand with greater clarity all of the services DOD contracts for, and measure and assess that work against a standard measure of work (``full time equivalents'') for our full-time Government personnel. Mr. Forbes. What do you view as the current weaknesses in the DOD workforce? And, in your view what are the causes for those weaknesses? Conversely, what are the strengths? Mr. Tamburrino. We are currently finalizing the 2010-2018 Strategic Workforce Plan for Congress that will identify workforce challenges and strategies to address workforce gaps based on requirements in mission critical occupations. A significant weakness of the current workforce plan is that competency identification and gap analysis have been limited. While competencies have been developed, or are in the process of being developed for most mission critical occupations, the Department lacks an enterprise tool to assess, track, and manage competencies across the workforce of nearly 800,000 employees. However, the current workforce plan does forecast workforce needs and gaps in mission critical occupations, identifies strategies to address environmental challenges, and includes results-oriented performance measures to track planning progress. The goal is to fully implement competency management tools across the Department for all major occupations and develop a workforce plan that fully meets the statutory planning requirements by FY 2015. As far as the strengths, the Department is building upon the improvements in managing the utilization of our senior leaders. We have designed and implemented executive development programs and a talent management process that is starting to develop and hone in on the core competencies we have identified as critical for our Senior Executive Service (SES), Senior Level (SL), and Scientific and Technical (ST) workforce. One area of additional focus is on our ability to succession plan to at the Enterprise level. We currently possess the ability to succession plan at the Component level, but recognize that in order to be able to know our talent capabilities as a Department, we must augment our process and tools to move to a level where we can effectively move talent across the Department. At the Component level, the services have established a robust talent management system and succession planning to accomplish this. However, we have not reached the ability at the present time to perform this at the Enterprise level. We are working towards that goal and are making significant efforts. ______ QUESTIONS SUBMITTED BY MR. TURNER Mr. Turner. Could you please explain the apparent contradiction between the Department's 2009 human capital strategic plan which stated that civilian senior leader requirements would increase by 400 positions by 2015 and the Secretary of Defense's expectation that the Department will eliminate at least 150 senior leader positions over the next two years? Mr. Tamburrino. In the 2009 report, 240 immediate needs were identified and 400 additional Senior Executive Service (SES), Senior Level (SL), and Scientific and Technical (ST) requirements were projected by 2015 based on mission requirements. At that time, the Department was growing considerably with emerging requirements. In FY 2010, the Department conducted a comprehensive review of its Civilian Service Executive cadre, seeking to eliminate positions that were not aligned with DOD's current mission set. Concluding this review, the Department identified 209 Civilian Senior Executives (to include Defense Intelligence Senior Executive Service (DISES) and Defense Intelligence Senior Level (DISL) positions) to be eliminated, combined or downgraded. Mr. Turner. What is the status of the Department's assessment of its senior leader positions, in response to the Secretary's memo? What were the results of the assessment and were they documented as GAO had recommended? Mr. Tamburrino. In response to GAO's recommendation to document our biennial process, we have included this process in Department of Defense Instruction (DoDI) 1400.25, Volume 923, ``DoD Civilian Personnel Management System: Career Life Cycle Management of Executive Talent and Sourcing,'' which is currently entering the Department's formal coordination process. The Secretary's Efficiency Initiative resulted in 209 Civilian Senior Executive (CSE) positions for elimination or downgrade. This CSE population included Senior Executive Service (SES), Senior Level (SL), Senior Technical (ST), Defense Intelligence Senior Executive Service (DISES), Defense Intelligence Senior Level (DISL), and Highly Qualified Experts (HQE). Currently, the Department has eliminated 102 CSE positions. Mr. Turner. Are there going to be civilian reductions-in-force (RIF) because of the billet freeze? Given the magnitude of reductions you may need to make to meet the billet freeze, how will it affect the long-term viability of your mission, and retention of the right civilian and contractor skills mix? Mr. Tamburrino. Until all reviews are completed and organizational efficiencies fully implemented, projecting potential RIF actions in the future would be premature. The Department is committed to its civilian workforce and uses all possible personnel tool/processes available to avoid the potential for involuntary separations. Current guidance is to maintain FY10 civilian funding levels, with some exceptions, for the next three years. This direction was implemented in conjunction with organizational assessments and mission/function prioritization. DOD organizations, military departments and defense agencies continue to review their workload and staffing (military, civilian, and contracted services), identifying low priority or marginal value functions for elimination. As part of these reviews, resources/personnel may be realigned/reassigned to minimize potential adverse personnel actions, such as reductions-in-force (RIF). In instances when and where appropriate, organizations have requested and have been granted relief from FY10 funding levels to meet critical workload requirements and ensure appropriate workforce mix and skill allocation. Mr. Turner. In February 2011 GAO noted that acquisition management has a shortage of trained personnel to oversee increasingly complex contracts. With this in mind, could you please explain then why the Air Force did not exempt acquisition personnel in their May 2011 Implementation of Civilian Hiring Controls? Mr. Charles. Current Air Force hiring controls exempt acquisition positions funded by the Defense Acquisition Workforce Development Fund. Mr. Turner. The April 2010 workforce strategy indicated that DOD intended to grow its acquisition workforce by nearly 20,000 individuals through fiscal year 2015, through a combination of about 10,000 new hires and an equal number from insourcing functions that were being performed by contractor personnel. Since the report was issued, the Secretary of Defense has announced his intent to limit DOD's budget growth and announced that insourcing decisions were to be made on a case-by-case basis. Could you explain the reasoning in these two differing positions? Does AT&L plan to publish a policy on human capital management? Mr. Charles. DOD has made significant progress towards increasing capacity of the in-house acquisition workforce and has continued growth supported by the Defense Acquisition Workforce Development Fund. DOD is assessing its progress and at this time it is appropriate that additional insourcing that would result in new civilian funding requirements be approved on a case-by-case basis. DOD is working closely with DOD components on continuation of efforts to strengthen the workforce and is preparing an updated human capital report which will be provided to Congress. ______ QUESTIONS SUBMITTED BY MR. PALAZZO Mr. Palazzo. As a small business owner and a CPA I am all too familiar with the challenges of running a business, and as a Marine and an Active National Guardsman, I have had an opportunity to work with the DOD's civilian workforce in many different capacities. Lack of leadership and lack of a consistent approach in reforming and modernizing the Federal Government's management practices is nothing new, and the lack of consistency and effective practices has created a serious problem within the DOD. I think this is one of the biggest challenges facing our committee. Because of mistakes made within DOD (or by previous policy makers), it is vital that the members of this committee identify the problems, correct the errors, and assist DOD in identifying the steps to avoid these problems (in the future). I for one want to ensure that the people of my district and the men and women serving our country in uniform are not negatively affected by these same issues. My district includes several military bases that I am very proud of and I am particularly proud of the men and women who are working there, and the thousands of soldiers and airmen that come through every year for training or deployments. One of the issues that I consistently hear about from the men and women working in support of the DOD facilities in Mississippi is insourcing within the Department of Defense. a) Do you believe that insourcing jobs to the Federal Government has had any effect on the problems that we are seeing today in the field of Human Capital Management, leadership and management practices in particular? b) I believe that the private sector's management practices, in many cases, are superior and more focused that those used within our DOD civilian workforce. What are your thoughts on the practices used by industry versus those used within DOD? c) Are there any partnerships to be gained here, by which the DOD can use proven business practices to get back on track? Mr. Tamburrino. a) No. Across the Department, insourcing has been a very effective tool to rebalance the workforce, realign inherently governmental and other critical work to Government performance (from contract support), and in many instances, to generate resource efficiencies for higher priority goals. Among other things, our insourcing efforts support operational readiness, mitigate risk, and ensure continuity of operations. These efforts help deliver the best support possible, with an appropriately structured workforce and in a fiscally efficient manner, to our Soldiers, Sailors, Airmen, and Marines, and their families. b) DOD is aggressively moving toward Strategic Human Capital Management business practices (also in use with the private sector) that enhance our ability to develop a high-performing workforce that meets the mission needs of DOD today and in the future. We are moving in the direction of developing a portfolio of analytical capabilities which will allow us to understand the demand signal for personnel resources, to include the proper workforce mix of active and reserve military, civilian, and contract requirements, and to identify the strengths and weaknesses in the skill portfolio of our workforce. DOD is tracking strategic workforce planning progress using results- oriented performance measures, which are being further refined and institutionalized. We are also implementing a corporate governance structure to oversee the effective management Total Force planning and requirements. c) Though the Federal hiring process differs from private sector processes due to Merit System Principles established through Federal regulation, DOD has leveraged a number of private sector practices as part of its hiring reform implementation efforts. Since 2007, DOD has conducted Business Process Review efforts across the enterprise using Lean Six Sigma methodology to identify inefficiencies in its overall hiring process. In addition, the Department has reviewed studies conducted by the Corporate Leadership Council, the Corporate Executive Board, and the Partnership for Public Service, thereby adopting best practices in hiring metrics, strategic recruitment, and candidate assessment. Some of these best practices include streamlining job opportunity announcements, developing executive dashboards, developing targeted candidate assessments, and creating on boarding training for hiring managers. Finally, DOD has partnered with the Office of Personnel Management to develop competency models that identify the toolkit of skills that employees in a career field should possess as they progress from entry through senior-level positions.